The Treasury Department has issued new regulations aimed at preventing money laundering through cash purchases of residential real estate. The rules, which require investment advisers and real estate professionals to report cash sales to legal entities, trusts, and shell companies, are part of the Biden administration’s efforts to combat financial crimes. All-cash transactions are seen as high-risk for money laundering and can drive up housing prices, a key economic concern.
The regulations, administered by FinCEN, will require professionals to disclose details of the sale, including names of buyers and beneficiaries, property information, and payment details. Treasury Secretary Janet Yellen stated that the rules address major regulatory gaps and make it harder for criminals to exploit the real estate sector.
Industry representatives, including the National Association of Realtors, welcome the rules as a pragmatic approach to combatting money laundering. The rules come as part of the administration’s broader push for greater corporate transparency, which includes efforts to prevent the abuse of anonymous shell companies.
Despite these efforts, a federal judge in Alabama ruled in March that the Treasury Department cannot require small businesses to disclose information about their owners and beneficiaries, highlighting the challenges in enforcing transparency measures.
The new regulations are seen as a step forward in the fight against financial crimes and money laundering in the U.S., with advocates praising them as much-needed safeguards to prevent the exploitation of the real estate and investment sectors by criminals.
Source
Photo credit www.dailynews.com
